The Securities and Exchange Commission has created a new group of examiners to oversee credit rating agencies, which came under sharp criticism for their role during the financial crisis. The SEC has already adopted a number of measures to increase transparency at credit rating agencies, which are paid by the issuers they rate. But greater oversight is needed with officials expected to conduct both routine and special examinations of their activities, Ms Schapiro is set to tell a Congressional oversight hearing on Tuesday.
The plan is part of a wide range of structural changes being made at the SEC, which has faced withering criticism in the past year for its oversight of financial firms and ratings agencies as well as for failing to detect the Bernard Madoff fraud in spite of credible allegations brought to it for at least a decade. Source: SEC
BIIA Comment: One question remains unanswered: “who will regulate and certify the regulators? Regulators are civil servants and are paid only a fraction of what financial services experts get in salaries and bonuses. As long as this disparity exists one will not attract the brightest and most experienced people to be regulators. As in the past, the possibility that incompetence, complacency and corruption may reign, remains high.
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